Crowdfunding The Upper End Of The Market

At long last, the Title III Equity Crowdfunding rules passed the SEC last week. By the end of January 2016, non-accredited* investment will be live in the US. A fellow Forbes contributor Chance Barnett wrote about the historic SEC vote here. All over the country, platforms and companies are gearing up to raise funds or secure debt. It’s an exciting time for the non-accredited investor!

However, there is another interesting slice of the capital market that is being addressed by Nin Desai, CEO of NIN Ventures, which is an online crowdfunding technology venture capital (VC) fund that invests Series A and B rounds in disruptive technology companies in the US. Companies are in the 3D-printing, cloud computing, education, financial technology, and virtual reality space.

Nin has worked in the VC world for more than ten years. Her idea to automate the VC fund came when a fund failed to raise the usual multi-million dollars to support the usual staffing. She outsourced the development, playing the role of the business analyst for the platform NIN Ventures now uses to raise, manage, and report online for funds smaller than the usual VC fund.

Nin shared her story with me last month when we sat down in her home city of Chicago. I think of her solution as crowdfunding at the upper end of the market or Bentley style.

Mary Juetten: What does your company do? What problem are you solving?

Desai: The most recent (i.e., 2008-2009) turmoil in the market led to a change in the way business was done across all industries, and there was a need to invest in new ideas and startups. On the other hand, venture funds that would invest in these startups were on a decline. The traditional sources of funding for a venture fund (e.g., pension funds, endowments funds, institutions, etc.) were drying up, and that’s where the JOBS Act or crowdfunding stepped in. As a fund, we have now opened ourselves to other “accredited investors” who can invest in our fund using multiple investment options like 401k, defined benefit plan, digital currencies, or a checking/saving account.

Startups are the engine that drives an economy, and as a venture fund, when we invest in a company, especially disruptive technology companies because of their low cost and fast-growing nature, it creates job, and as a result, boosts the economy. Especially in times like these where we are going through a budget and pension crises in Illinois, it’s really important that we as a state and country promote and invest in new and disruptive technologies.